Scottish Court of Session Decisions

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Cite as: [1865] ScotLR 1_39_2, [1865] SLR 1_39_2

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SCOTTISH_SLR_Court_of_Session

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Court of Session Inner House Second Division.

1 SLR 39_2

Macbride

v.

Grierson, Clark, and Co.
Headnote:

This case, which we reported at the time of its hearing, and which involves the construction of a cautionary bond, was advised to-day.

Judgment:

The Lord Justice-Clerk said—This case is one of some difficulty, but I don't think that it depends on any clear legal principle, but on the construction of a particular bond. The question is, whether in this cash credit bond there be five cautioners or three, or, in other words, whether, in addition to the caution granted by Clark, Grierson, & Co., as a company, there is superadded a personal obligation of caution by the individual partners of the company? Now, this is just one of those cases in which it is impossible not to suspect that the parties may have intended to say something very different from what they have said, and that is always a painful position. But however much we may suspect that, we are bound to give to the bond what the Lord Ordinary says is its sound legal construction, and if, according to that construction, an obligation is laid on Mr Grierson and Mr Clark as individuals, we must give effect to it, however much we may suspect or believe that that was not intended. The words have a clear legal meaning, and whatever that is it must receive effect. The way in which I look at this case is, in the first place, to consider who I think are bound to the bank. I think there are nine persons bound. [His Lordship enumerated the two firms and the various individual partners and others bound.] Speaking of William Anderson, John Anderson, and Francis Clark, the individual partners of the firm of William Anderson, Son, & Co., his Lordship said—All these gentlemen are bound conjunctly and severally to

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the bank. The bank could charge any of the three. Moreover, the charge could be made by the bank in circumstances that would involve the greatest personal hardship, because another clause of the bond provides that if there is a change of partnership, all the new partners and their heirs and representatives are still to continue bound just the same as before. Now, if these three gentlemen cease to be partners of William Anderson, Son, & Co., and other partners take their place, the new firm would be liable as the old one, and these gentleman would be liable as individuals, even although they had ceased to be members of the firm, and would be liable along with the firm. Now, if that is the meaning of the bond as to one firm, it has the same meaning as to the other, and therefore I hold that the firm of Grierson, Clark, & Co., and the two gentlemen who are the individual partners of it, are liable to the bank singuli in solidum. That is to my mind the plain construction of the bond in regard to the obligation to the bank. But then it appears—and it is a conceded fact—that the party for whose benefit the cash credit was created, and who is therefore in a question of relief principal debtor to the other cautioners, is the firm of Wm. Anderson, Son, & Co. For the benefit of that firm the cash credit was created, and the bond was granted. That raises a different question. It was ingeniously and forcibly pleaded in argument that if there are five cautioners there must be three others, and besides the firm of William Anderson, Son, & Co., the three individual partners of it are bound in the same manner as the individual partners of the firm of Grierson, Clark, & Co. But the answer to that is plain. We are now in a question of relief among co-obligants. In that question I apprehend that William Anderson, John Anderson, and Francis Clark are principal debtors, in respect of their being partners of the company for whose benefit the cash credit was created. His Lordship here enumerated the parties bound as cautioners, and continued—Now here I apprehend the construction of the obligation must just be on the same principle as our construction of the obligation in regard to the bank. If all are bound conjunctly and severally—that is to say, in solidum—the relief must be regulated on the same principle, because, if one of the partners of Grierson, Clark, & Co. is made to pay the whole amount to the bank, he must have relief from his own firm, and the individual partners of it. The obligation to the bank is the foundation of the obligation in a question of relief, and therefore I adhere to the interlocutor of the Lord Ordinary. The other judges, but Lord Neaves with some hesitation, concurred.

Counsel:

Counsel for Defender—The Solicitor-General and Mr Clark. Agents— Messrs A. G. R. & W. Ellis.

Counsel for Pursuer— Mr Pattison and Mr Watson. Agent— Mr James Renton, S.S.C.
1865